Jump to content

Quick Question; balance on Charge Off


skrood
 Share

Recommended Posts

No a charge off is an accounting term. It means that the company has removed the balance due from their assets sheet and moved it to profit and loss. They also probably filed it as a loss on their corporate taxes. If they succeed in collections after charge-off they take the collection as an asset and have to pay back the tax break they got. (I'm personally questioning if these big creditors actually pay back the tax break...I don't think they do...and they "double-dip" the system). It doesn't negate the debt.

If they sell the debt to another party, then they must list it as sold and with a $0 balance.

If they forgive the debt, then they must list it as settled with a $0 balance. This applies wether or not they issue a 1099 on the forgiven balance.

Link to comment
Share on other sites

Guest
This topic is now closed to further replies.
 Share

×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.. For more information, please see our Privacy Policy and Terms of Use.